A D/E of 1 means creditors and owners finance the business equally. Capital-intensive industries such as utilities often run 1–2; software companies often below 0.5. Very high D/E increases bankruptcy risk.
How to use the Debt to Equity Ratio Calculator
- Total liabilities
- Total shareholders’ equity
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter total liabilities (or total debt) and total shareholders’ equity.
Tips
- Check whether rates are quoted annually, semi-annually or per period.
- Bond prices and yields move in opposite directions – a higher yield means a lower price.
- Use the bond’s clean price (without accrued interest) for yield calculations.
- Credit ratios are most useful when tracked over several years.
Common mistakes to avoid
- Confusing the coupon rate with the yield.
- Using the face value instead of the market price.
- Forgetting that callable bonds may be redeemed before maturity.
Inputs explained
| Field | What to enter |
|---|---|
| Total liabilities | Amount in your currency |
| Total shareholders’ equity | Amount in your currency |
What each result means
- Debt to equity ratio = [Total liabilities]÷[Total shareholders’ equity]
- Debt ratio = [Total liabilities]÷([Total liabilities] + [Total shareholders’ equity])×100
- Equity multiplier = ([Total liabilities] + [Total shareholders’ equity])÷[Total shareholders’ equity]
Example values
How the main result changes when Total liabilities changes and everything else stays at the example values above:
| Total liabilities | Debt to equity ratio |
|---|---|
| 600,000 | 0.75 |
| 900,000 | 1.13 |
| 1,200,000 | 1.5 |
| 1,500,000 | 1.88 |
| 1,800,000 | 2.25 |
| 2,400,000 | 3 |
Formula
D/E = total liabilities ÷ shareholders' equityDebt ratio = liabilities ÷ (liabilities + equity)Worked example
Inputs — Total liabilities: $1,200,000; Total shareholders' equity: $800,000.
Results — Debt to equity ratio = 1.5; Debt ratio = 60 %; Equity multiplier = 2.5 ×.
Frequently asked questions
What is a good debt to equity ratio?
Often 1–1.5 or lower, depending on the industry.
Can D/E be negative?
Yes, if equity is negative – a sign of financial distress.
Should I use total debt or total liabilities?
Analysts use both; state which you use.
What formula does the Debt to Equity Ratio Calculator use?
D/E = total liabilities ÷ shareholders' equity.